During the "May Day" period, a project named "Unipeg" (unipeg.art) suddenly went viral online.

This is a project built on Uniswap V4. The mechanism of this project is very unique, as it is both an NFT and an ERC-20 token.

It is called an NFT because, like the NFT projects we are familiar with, it consists of art pieces (unicorns made of pixels) with a total supply of 10,000.

However, behind each NFT is not the well-known ERC-721 or ERC-1155 token, but a complete Unipeg token (uPEG). When a user holds a complete Unipeg token, their wallet corresponds to a unicorn pattern. This Unipeg token is the well-known ERC-20 token.

All Unipeg tokens are traded on Uniswap.

When a user buys uPEG tokens on Uniswap (for example, buying 1.2 uPEG), the integer part (1 uPEG) corresponds to one unicorn, while the remaining decimal part (0.2 uPEG) becomes a token fragment that does not represent any unicorn.

If the user sells the single uPEG they hold, the unicorn represented by that uPEG will disappear permanently.

Similarly, if a user buys tokens and does not purchase whole uPEG tokens, they will not receive a unicorn.

(For more information about the formation mechanism of this token and the unicorn, please refer to the link at the end of the article.)

Under this mechanism, a situation that inevitably occurs is: unicorns will become increasingly scarce, and eventually, the Uniswap trading pool will be filled with fragments of uPEG tokens.

Due to this unique operating mechanism, when the project was exposed, participants rushed to buy rare unicorns, causing the token price to rise dozens of times within a few days.

This increase is rarely seen in both the NFT and ERC-20 tracks.

After the project became popular, an "episode" occurred.

A hacker exploited a mechanism in the contract to repeatedly wash trading in a short period, continuously filtering out rare unicorns. This triggered a panic sell-off among token holders, leading to a significant price drop, after which the price gradually stabilized once the incident calmed down.

Simply put, in terms of the NFT value of this project, based on past experience, for its price to stabilize and increase in the long term, I believe it must meet one of the following two conditions:

- The project possesses unparalleled uniqueness and primacy within the entire ecosystem, like CryptoPunks.

- The project can gradually derive a vast ecosystem, so that any future participant in this ecosystem cannot avoid this NFT.

First, let's consider the first condition.

Looking back, among the many NFT projects we have experienced (whether in the Ethereum or Bitcoin ecosystem), very few NFTs have truly achieved the uniqueness and primacy of CryptoPunks.

This challenge is very significant.

Even in the once extremely popular Bitcoin NFTs, it is still very difficult to find NFTs that can rival CryptoPunks in historical value and have strong consensus.

Therefore, it is quite challenging for this unicorn to meet this condition.

Now, let’s examine the second condition.

Except for CryptoPunks, the vast majority of NFTs need a constantly growing and expanding ecosystem to maintain their price over the long term and to continue to appreciate in value.

I once had high hopes for Bored Apes. However, based on the practices of recent years, it has not succeeded so far.

I also had high hopes for the Bitcoin ecosystem, believing that if Bitcoin could develop its own ecosystem, the NFTs within it would also have great potential. But the practices of recent years have also shown that it has not been successful so far.

The only one still making efforts and occasionally stirring up small waves in the NFT ecosystem is Pudgy Penguins.

They have been working hard and persevering, and so far they have made multiple efforts. However, each time their impact does not last long, and once that influence fades, their NFTs fall again.

I can only say that this project is still persisting, but it cannot be said that it has succeeded.

So from this perspective, it is still too early to judge how the value of this unicorn will develop in the future.

But if we set aside the investment value of the project, from the perspective of ecological innovation, this project is remarkable.

"The beauty of DeFi lies in the fact that the platform supporting it, Ethereum, is an open and permissionless platform. As long as there is this platform, the seeds of innovation will be continuously sown, and there will always be a tiny number of genius individuals and teams who will traverse the annals of history, creating exceptionally powerful projects that will be eternally recorded in history." (April 22, “My Attitude Towards DeFi: Cautious at Present, Bright in the Future”).

The innovation of this project is something that has never been seen in the DeFi ecosystem and is also something unprecedented in the real world.

Although whether this innovation has practical value, and what context it can be used in, we still cannot prove with examples and evidence, it once again demonstrates that this is a platform that carries innovation and where innovation may erupt at any moment.

As long as there is such a platform, we are bound to see amazing masterpieces again, and we will again witness works that disrupt the world.

Reference link:

https://x.com/798_eth/status/2050019560125063290

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